Saturday, November 10, 2007

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road

DEVELOPERS continue to trigger the release of sites from the Government Land Sales programme’s reserve list.

The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.

The developer who made the application - who was not identified - has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.

The site will be launched for tender in about two weeks.

The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.

‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.

‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’

A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.

Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.

He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.

‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.

‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.

CBRE’s Mr Tan predicts at least five or six bids.

‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.

Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.

So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.